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Access to Long-Term Care After a Wealth Shock: Evidence from the Housing Bubble and Burst

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  • Joan Costa Font
  • Richard Frank
  • Katherine Swartz

Abstract

Home equity is the primary self-funding mechanism for long term services and supports (LTSS). Using data from the relevant waves of the Health and Retirement Study (1996-2010), we exploit the exogenous variation in the form of wealth shocks resulting from the value of housing assets, to examine the effect of wealth on use of home health, unpaid help and nursing home care by older adults. We find a significant increase in the use of paid home health care and unpaid informal care but no effect on nursing home care access. We conduct a placebo test on individuals who do not own property; their use of LTSS was not affected by the housing wealth changes. The findings suggest that a wealth shock exerts a positive and significant effect on the uptake of home health and some effect on unpaid care but no significant effect on nursing home care.

Suggested Citation

  • Joan Costa Font & Richard Frank & Katherine Swartz, 2017. "Access to Long-Term Care After a Wealth Shock: Evidence from the Housing Bubble and Burst," NBER Working Papers 23781, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:23781
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    Cited by:

    1. Jingjing Xu, 2024. "Intergenerational transfers in China: What are the patterns of the transfers and when do the transfers occur?," International Studies of Economics, John Wiley & Sons, vol. 19(1), pages 117-150, March.
    2. Moulton, Stephanie & Rhodes, Alec & Haurin, Donald & Loibl, Cäzilia, 2022. "Managing the onset of a new disease in older age: Housing wealth, mortgage borrowing, and medication adherence," Social Science & Medicine, Elsevier, vol. 314(C).
    3. Tran, My & Gannon, Brenda & Rose, Christiern, 2023. "The effect of housing wealth on older adults’ health care utilization: Evidence from fluctuations in the U.S. housing market," Journal of Health Economics, Elsevier, vol. 88(C).
    4. Jing Dong & Daifeng He & John A. Nyman & R. Tamara Konetzka, 2021. "Wealth and the utilization of long-term care services: evidence from the United States," International Journal of Health Economics and Management, Springer, vol. 21(3), pages 345-366, September.
    5. Liu, Yinan & Zai, Xianhua, 2022. "The Unintended Effect of Medicaid Aging Waivers on Informal Caregiving," EconStor Preprints 249566, ZBW - Leibniz Information Centre for Economics.
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    7. Cäzilia Loibl & Alec P. Rhodes & Stephanie Moulton & Donald Haurin & Chrisse Edmunds, 2022. "Food insecurity among older adults in the U.S.: The role of mortgage borrowing," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 44(2), pages 549-574, June.

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    More about this item

    JEL classification:

    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination

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